Evolution of GDP

Seasonally adjusted GDP increased by 0.3% in the euro area and by 0.4% in the EU during the fourth quarter of 2021, compared with the previous quarter, according to preliminary flash estimates published by Eurostat. In the third quarter of 2021, GDP had grown by 2.3% in the euro area and by 2.2% in the EU. Compared with the same quarter of the previous year, seasonally adjusted GDP P increased by 4.6% in the euro area and by 4.8% in the EU in the fourth quarter of 2021, after +3.9% in the euro area and +4.1% in the EU in the third quarter of 2021.

Industrial production

In November 2021, seasonally adjusted industrial production increased by 2.3% in the euro area and by 2.5% in the EU, compared with October 2021, according to estimates from Eurostat. In October 2021, industrial production fell by 1.3% in the euro area and by 0.8% in the EU as compared to September 2021.

In November 2021 compared with November 2020, industrial production decreased by 1.5% in the euro area and remained unchanged in the EU.

Production in construction

In November 2021 compared with October 2021, seasonally adjusted production in the construction sector decreased by 0.2% in the euro area and increased by 0.2% in the EU, according to estimates from Eurostat. In October 2021 compared to the previous month, production in construction increased by 0.6% in the euro area and by 0.7% in the EU. In November 2021 compared with November 2020, production in construction increased by 0.5% in the euro area and by 1.3% in the EU.

Retail trade

In December 2021 compared with November 2021, the seasonally adjusted volume of retail trade fell by 3.0% in the euro area and by 2.8% in the EU, according to estimates from Eurostat. In November 2021, the retail trade volume increased by 1.0% in the euro area and by 0.9% in the EU compared to the previous month. In December 2021 compared with December 2020, the calendar adjusted retail sales index increased by 2.0% in the euro area and by 2.6% in the EU.

Inflation

In January 2022, the euro area annual inflation is expected to be 5.1%, up from 5.0% in December 2021, according to a flash estimate from Eurostat. In January 2021, the annual inflation rate was down to –0.3% in the euro area.

Unemployment

In December 2021, the euro area seasonally adjusted unemployment rate was 7.0%, down from 7.1% in November 2021 and from 8.2% in December 2020. The EU unemployment rate was 6.4% in December 2021, down from 6.5% in November 2021 and from 8.2% in December 2020.

Eurostat estimates that 13.612 million men and women in the EU, of whom 11.481 million in the euro area, were unemployed in December 2021. Compared with November 2021, the number of persons unemployed decreased by 210 000 in the EU and by 185 000 in the euro area. Compared with December 2020, unemployment decreased by 2.196 million in the EU and by 1.828 million in the euro area.

Economic sentiment indicator

DG ECFIN’s Economic Sentiment Indicator (ESI) picked up in the euro area in February 2022, increasing month-on-month by 1.3 points to 114.0. The increase was driven by mounting confidence in services, retail trade and, to a lesser extent, construction, while confidence stayed virtually unchanged in industry and declined slightly among consumers.

€-COIN

The €-COIN indicator fell from 0.21 in December to 0.01 in January 2022, indicating a further weakening in economic activity at the beginning of 2022.

The indicator continues to be curbed by the increase in prices, which is affected by rising energy costs, and by the less favourable opinions of households and firms about the economy.

Methodological notes.

Business Climate Indicator (BCI)

The Business Climate Indicator (BCI) (2) for the euro area (EA) increased by 1.81 points in January 2022, following an increase by 1.78 points in December 2021.

Methodological notes.

Composite Leading Indicators (CLIs)

The OECD Composite Leading Indicators (CLIs), designed to anticipate fluctuations in economic activity over the next six to nine months, continue to point to a moderation in economic growth in several major economies, albeit to a different extent across countries.

Among the major OECD economies, the CLIs for Canada, Germany and Italy confirm having passed a turning point in economic activity, as flagged in last months’ assessment, and now point to moderating growth momentum. In the United States, Japan and the euro area as a whole, the CLIs have also passed a cyclical peak, but have since remained relatively stable. In France, the CLI points to stable growth around the long-term trend.

Among the major emerging-market economies, the CLI for China (industrial sector) continues to point to growth losing momentum, with similar indications now emerging for India and slowing growth continuing in Brazil. In Russia, the CLI now points to stable growth.

Methodological notes.

DZ BANK’s Euro-Indicator

The DZ BANK’s Euro-Indicator rose by 0.2% to 101.5 points. The year-on-year increase is now 2.2%, after +2.4% in the previous month. The further year-on-year decline is due to the strong recovery of the indicator at the beginning of 2021, resulting in a negative base effect.

In the past month, indicators from the industrial sector in particular contributed to the positive development of the Euro indicator. Companies’ inventories have recently recovered somewhat, which is likely to indicate a normalization trend in the currently very tight supply situation for intermediate products.

Methodological notes.

Autumn forecasts

European Commission: The EU economy is rebounding from the pandemic recession faster than expected. Households responded to the improving epidemiological situation and the gradual relaxation of containment measures with a spending spree that propelled EU private consumption growth.

IMF: The global economic recovery is continuing, even as the pandemic resurges.

OECD: The euro area aggregate includes OECD member countries (Cyprus and Malta are excluded from the EA aggregate as they are not OECD member countries). The global economic recovery remains strong, helped by government and central bank support and by progress in vaccination.

ECB: Cut-off date: The June and December projections only include information on the outlook for individual euro area countries. Compared with the June 2021 projections, the technical assumptions include lower interest rates, higher oil prices and a depreciation of the euro.